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First Time Home Buyer Loans and Assistance Programs

By Colleen Colkitt

When looking for a new home, or your first home, there are several factors that contribute to the property you can get. Financing the home is one of the first things you should look into so that you know your price range and explore your options from there!

Although different regions and areas define a first time home-buyer according to varying requirements, Pennsylvania and many county programs define it as a purchaser who has no owned or held a title to a home within the last 36 months. Many programs in PA are "in-house" mortgage programs, meaning the assistance relies and varies depending on income or they are area driven.

Keystone Home Loan

There are several types of Keystone loans, including the Keystone Home Loan, which is a program with the fewest eligibility requirements and the highest income and price limits. The maximum for this loan is $1,500 for those who qualify. To qualify, yu must be a first time home-buyer in Pennsylvania, and you must be an adult who plans to live in the particular residence during the first 12 months. A first time home-buyer in this case is defined as an individual who has not held a title for a property in the past three years. The program includes gross annual income limits for those who plan to occupy the property for the first year, with purchase limits for the property. Credit scores are held to a standard as well and the borrower must be able to cover the down payment.

The Keystone Home Loan PLUS is a loan offering the lowest income rate, with more stringent eligibility requirements. The maximum offered to those who qualify for this loan amounts to $3,000. This program offers even lower interest rates than the standard program above, and all the requirements mentioned previously must be met as well. This mortgage loan is only offered to specific targeted areas.

The Keystone Assistance Loan Program offers zero-interest second loans, to cover the costs associated with buying a home.

FHA

Fair Housing Administration, or FHA, offers a mortgage loan as part of the National Housing Act of 1934. Sometimes FHA and HUD are used interchangeable, because the programs are similar in nature. There is no income limit for an FHA loan, and it's even offered to those who aren't considered first time home-buyers. There is a maximum loan amount of $271,050 for a single family home or FHA-approved condominium. However, for duplexes, triplexes and 4 unit buildings, the loan limit is higher. The down payment on a 30 and 15 year mortgage is 3.5%, which is a considerably low rate.

VA

The Veterans Administration is administered through the Servicemen's Readjustment Act, or the GI Bill of Rights. Private lenders service this loan for Veterans, not the VA, because the VA guarantees the loan.

To qualify, applicants must be a Veteran who has served active duty and was honorably discharged from service after a minimum of 90 days of service during wartime, or a minimum of 181 executive days during peacetime.

There is a two-year requirement of the applicant enlisted after 1980 or was an officer and began after 1981. There is no income limit and also no maximum loan amount. In addition to this, no down payment is required and even the VA funding fee may be financed.

USDA

The United States Department of Agriculture offers a rural loan program with a 30 year fixed rate for lower to moderate income home-buyers. Applicants must be within a certain eligibility map and there's also not a down payment required! This is also available to those who are not first time home-buyers.

The income limit is up to 115% of the median income for the home's area. These income limits can be adjusted depending on children under the age of 18, disabled occupants, and those occupants over the age of 62 and child care expenses.

There is a maximum loan amount of 100% of the sales price or appraised value. The maximum loan amount is based upon monthly income and debt.

Conventional

Conventional and conforming loans are from the Federal National Association, or Fannie Mae, established in 1938. They're called conforming loans because the loans conform to the guidelines of Fannie Mae and Freddie Mac.

There is no maximum income limit, but there is a maximum mortgage loan amount. Typically the limit is $417,000 for a single family home or condo. In addition, the minimum down payment is 3%, but it's also dependent on the borrower's credit score and home location. Another standard rate for down payment is about 5% of the loan.

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